Saturday, October 3, 2009

So Much For Not Increasing Taxes On The Middle Class

John Podesta compared the nation’s current budget crisis to the situation formerPresident Bill Clinton faced in 1993 and said some form of a value-added tax is “more plausible today than it ever has been.”

“There’s going to have to be revenue in this budget,” said Podesta,Clinton’s former chief of staff and co-chairman of President BarackObama’s transition team, said in an interview on Bloomberg Television’s“Political Capital with Al Hunt,” airing today.

A so-called consumption tax would “create a balance” with European andJapanese economies and “could potentially have a substantial effect oncompetitiveness,” said Podesta. Value- added taxes in Europe and Japan encouragesavings by taxing consumption.

So the VAT (value added tax) is coming and it is being championed by John Podesta. Value added taxes, or consumption taxes are regressive. A little over four years ago Podesta said this on taxes:

The theoretical possibility that higher and progressive tax rates can impedehuman capital formation has been used to justify a switch away from aprogressive tax regime to some form of a flat tax. However, we believe that a fair tax code ought to be progressive, and therefore the goal ought tobe to keep labor tax rates low (while raising sufficient revenue) within aprogressive regime. By providing capital income with a tax preference, we arenecessarily shifting the tax burden onto income from work and hence the returnto skill accumulation.

Only a liberal could believe that what a faltering economy needs is a progressive income tax coupled with a regressive consumption tax. Taxing wealth, Podesta believes that capital gains should be taxed at the same rate as income, discourages investment. Taxing goods makes lower and middle class families to poor to save. It is a lose/lose proposition.

Podesta talks about "fairness" but while a value added tax may be fair, everyone gets screwed, bringing it in now is economic suicide. Employment is at 9.8%, American families are struggling, and this administration thinks that this is time to add 15% to the cost of groceries? Or a gallon of gas? Don't forget, this is even before Cap & Trade kicks in and prices skyrocket thanks to that government debacle.

What happened to Obama's pledge that he wouldn't raise taxes on 95% percent of Americans and why aren't the idiots who believed him speaking out? In the real world, families are cutting back and doing without. The administration needs to exist by the same rules as the rest of us. If it doesn't have the money to implement a pet project than the project doesn't get implemented.

It is time that the administration figure out that the American taxpayer is not the pot of gold at the end of the rainbow. We are tapped out.

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About Me

Woke up one day and decided I'd better start paying attention. Found out that there is a direct correlation between paying attention and ulcers.
The ulcers don't bother me. Fortunately, my parents credo was "Don't let the bastards get you down!" I never have.